In the last five years one in four people has been the victim of card fraud, according to a global study by ACI Worldwide. Fraud includes unauthorized activity on debit cards, credit cards or prepaid cards.
The United Arab Emirates topped the list of countries with the highest card fraud rates, with 44% of people experiencing some type of card fraud. China, India, the United States and Mexico rounded out the top five with rates of just over 40%. Germany, the Netherlands and Sweden were the three safest countries, with the lowest rates of card fraud at 16%, 13% and 10%, respectively.
After an episode of card fraud, 23% of consumers switched financial institutions out of frustration and 43% said they used their cards less often. According to survey responses, half of consumers put themselves at higher risk of fraud because through their own risky behavior. And more than one in ten people have been victims of card fraud more than once in the last five years.
After experiencing credit, debit or prepaid card fraud, consumers are at a higher risk of having their identities stolen because their personal information may have been compromised. Fifty-five percent of respondents said they were “very concerned” about identity theft and the prospect of having to repair any damage done to their financial lives.
Lack of confidence in banks
In 2013, there were 1,367 confirmed data breaches worldwide. Bank customers who experience card fraud often end up taking their business elsewhere. Twenty-three percent of fraud victims leave their financial institution after experiencing card fraud, and two in ten said they don’t have confidence in their banks ability to protect them from fraud. Even after receiving a replacement card, 43% said they used it less often than they did before.
Mike Braatz, senior vice president of Payments Risk Managements Solutions at ACI Worldwide, said that banks are experiencing challenges due to loss of customer confidence. “Consumers are increasingly concerned about fraud, and are losing confidence on a variety of levels,” he said. “This has immediate and long-term implications on customer loyalty, revenue and fee income.”
The ACI Worldwide Global Consumer Fraud Survey looked at over 6,100 consumers in 20 countries. About 300 people participated in each country, and countries were chosen from three regions: The Americas (including North and South America, Brazil, Canada, Mexico and the United States), EMEA (Europe, the Middle East, and Africa), and Asia-Pacific (Australia, China, India, Indonesia, New Zealand and Singapore). Research was conducted online in March 2014.